* Waning Dubai concerns, RBA hike boost risk appetite
* Yen falls after BOJ announces new easing measures
* Euro zone data adds to global recovery optimism (Adds comment, updates prices)
By Wanfeng Zhou
NEW YORK, Dec 1 (Reuters) - The U.S. dollar fell against the euro on Tuesday as worries about Dubai's debt problems eased, while rising stock and commodity prices also dimmed the greenback's safe-haven allure.
The yen weakened after the Bank of Japan announced more monetary easing measures to fight deflation and help the ailing economy while holding interest rates at 0.1 percent.
News that state-owned conglomerate Dubai World will restructure about $26 billion of its estimated $59 billion debt calmed investor fears of another global credit meltdown, helping push equity markets higher. For details, see [ID:nGEE5B0041]
"The (Dubai) problem is contained. It's much smaller than originally anticipated," said Matthew Strauss, senior currency strategist at RBC Capital Markets in Toronto. "We saw risk appetite really increase once again and investors were willing to buy riskier assets across the board."
The Reserve Bank of Australia's move to raise interest rates for a third straight month to 3.75 percent also fed investors' appetite for risk, along with reports showing better-than-expected European manufacturing data and strong German retail sales. [ID:nGEE5B00BY]
"As economic data continue to surprise to the upside, the recovery bulls have the upper hand and this is good for risk appetite and bad for the dollar," said Boris Schlossberg, director of currency research at GFT in New York.
In late trading, the euro rose 0.7 percent to $1.5107
The ICE Futures dollar index <.DXY>, a measure of the greenback against a basket of six currencies, fell 0.6 percent to 74.418.
On Wall Street, U.S. stocks jumped as data reassured investors about the health of the battered U.S. housing market. The Dow Jones industrial average <.DJI> hit its highest close in 14 months.
BOJ MOVE
The dollar was up 0.3 percent at 86.62 yen
The BOJ offered banks more short-term funds after an emergency meeting on Tuesday and said it will provide 10 trillion yen ($115 billion) in three-month funds at a fixed rate of 0.1 percent in a bid to bring down longer-term rates. See [ID:nT374859]
Political pressure on the BOJ to avert recession has grown, but Tuesday's decision was seen as a way to avoid a return to a narrow form of quantitative easing, under which the BOJ slashed rates to zero and flooded markets with cash in 2001-06.
Despite the yen's weakness on Tuesday, some analysts said the BOJ moves will not be enough to slow long-term yen buying against the dollar.
"The new liquidity provision has not driven short-term yen rates sharply lower and yen longs have not been put in sufficient pain to force them to liquidate," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York.
Commodity-linked currencies jumped as oil prices rose towards $79 a barrel and gold
The Australian dollar rose 1.2 percent to US$0.9262
The New Zealand dollar gained 1.7 percent to US$0.7273